AT&T: San Francisco network improvements are coming, so are usage controls

The good news: AT&T recognizes that its data network performance in San Francisco and New York is below its standards and the company is working to address those areas specifically.

The bad news: AT&T is getting closer to adopting usage-based pricing for data, meaning you bandwidth hogs on the AT&T network might be saying goodbye to unlimited data soon.

Ralph de la Vega, CEO of mobility and consumer markets for AT&T said antennas in San Francisco need to be replaced and the upgrades have taken longer than the company would have liked.

This acknowledges what a lot of AT&T, and specifically iPhone users, have known: that network coverage can be spotty in this hilly city that is thick with fellow iPhone lovers.

Indeed, the iPhone and other smart phones are creating headaches for AT&T. De la Vega said just 3 percent of smart phones consume 40 percent of the network capacity. Basically, we’re talking about the iPhone.

But the answer isn’t going to be found in just network improvements, de la Vega said. He said AT&T is working toward some type of usage-based pricing or incentives, which he said is inevitable.

“What’s driving [high] usage are things like video or audio that plays around the clock,” de la Vega said at an analysts conference. “We have to get to those customers and get them to recognize they have to change their patterns, or there are things we will do to change those patterns.”

That will be paired with more information for users about their particular usage. He said education about usage has been known to curb high traffic.

“We need to educate the customer … We’ve got to get them to understand what represents a megabyte of data,” he added. “We’re improving all our systems to let consumers get real-time information on their data usage.”

So there you have it, the end of unlimited data is coming. It doesn’t look like it will be usage caps, which some broadband providers are testing. But it will most likely mean different sets of pricing tiers for users.

This is not going to be welcome news for iPhone users, who reportedly eat up 10 times the bandwidth of typical wireless consumers. Much of the joy of the iPhone is the Internet browser and all the apps, many of them use the Internet. Make people think twice about using all these goodies and it strips some of the magic of the device.